During early trading on Tuesday, Kalpataru Projects International witnessed a notable 7.3% increase in its share price, reaching ₹677.50 per share. This surge was driven by an announcement made on Friday through an exchange filing, where the company stated that it, along with its international subsidiaries, had secured new orders worth ₹1,016 crore.
These orders encompass ₹552 crore in the T&D business across India and overseas markets, as well as ₹464 crore in the B&F business within India.
Commenting on the order win, Mr. Manish Mohnot, MD & CEO, KPTL, said," “We are pleased with the order wins, especially in our T&D and B&F business. The order wins in the T&D business helps us to further diversify our clientele and strengthen our order book, particularly in the domestic T&D market."
"The orders in the B&F business from marquee clients reaffirms our confidence in the strong growth of this segment. With the above orders, our YTD FY24 order inflow stands at around ₹8,400 crores, and additionally, we have a strong L1 position, which gives us the confidence to deliver on growth targets," he added.
Kalpataru Projects International is one of the largest specialised EPC companies engaged in power transmission and distribution, buildings & factories, water supply & irrigation, railways, oil & gas pipelines, urban mobility (flyovers & metro rail), highways, and airports. It is currently executing projects in over 30 countries and has a global footprint in 70 countries.
The company shares over the last one-year period rallied by 61.35%, and they are up by 169% in two years. For the April-June quarter of FY24, the company posted healthy numbers, with its consolidated net profit improving by 28.40% YoY to ₹113 crore, while the revenue from operations grew by 15.33% YoY to ₹4,241 crore, driven by robust project progress and a strong order backlog.
Q1FY24 order inflow came in at ₹73.8 billion, down 7.2% YoY (on a higher base) and increased by 28% on a QoQ basis. This was mainly led by T&D and the building and factories segment. Order book increased by 28% YoY to ₹473 billion.
Brokerage firm ICICI Securities expects KPIL to be a strong beneficiary of the government’s increased focus on infrastructure. It believes initiatives like Global Energy Transition, Energy Security, One Nation, One Gas Grid, the Jal Jeevan Mission (tap water supply), and increasing urbanisation auger well for KPIL. Post-merger with JMC, the brokerage believes the company has further strengthened its balance sheet, enabling it to bid for larger projects.
The company is well on track to divest its non-core investments, which may result in freeing up capital for repaying debt. Prudent execution track record and focus on the balance sheet have consistently been the key success factors behind KPIL’s growth story, said the brokerage.
Given the strong operating performance in Q1FY24, sustained order inflow in Q1FY24 and better operating outlook with stable raw material prices, ICICI Securities lifted its FY24E and FY25E PAT estimates by 4% and 8%, respectively.
As a result, the brokerage raised its standalone (merged entity of Kalpataru and JMC) PAT multiple to 13xFY25E (vs. 12xFY25E PAT earlier). It maintained a 'buy' rating on the stock with a revised target price of ₹737 apiece compared to the earlier target price of ₹630 per share.
15 analysts polled by MintGenie on average have a 'strong buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie. We advise investors to check with certified experts before taking any investment decisions.